Property Factors Code of Conduct

Written statement

A property factor (manager) must issue a Written Statement of the services he/she provides

within 4 weeks of being notified of new owner moving in or being retained

as soon as possible after any major change (but no longer than 1 year after)

within 4 weeks of an owner’s request

The Statement must include:

THE FACTOR’S AUTHORITY TO ACT

how initially employed - this may be because he/she was named in the Title Deeds by the developer or through a decision of a majority of owners or because he was already being used by them as a property manager

delegated authority – what he/she can do without going back to owners - this could include commissioning repairs up to an agreed value

SERVICES PROVIDED

what the factor will do and the target times for taking action in each case.

other services the factor may provide at an additional fee (the amount of additional fee should be given)

FINANCIAL AND CHARGING ARRANGEMENTS

the management fee and how it is reviewed

each owner’s share of the fee, service charges and common repair costs

how often he will send bills and how you can pay, late payment charges etc

COMMUNICATIONS

timescales for dealing with enquiries

in-house complaints procedure

how to complain to the Home Owner Housing Panel (HoHP)

In dealing with you, your property factor (manager) should not be:

misleading

abusive or threatening - saying that he may take legal action - in reasonable circumstances - is not considered threatening

DECLARATION OF INTEREST

whether he owns or manages any rented flats in the building etc

HOW TO END THE ARRANGEMENT

how to change your property manager/ factor

notice period

any penalty for early termination

CONSULTING OVER ADDITIONAL WORK

Procedures for consulting with owners about any work that will incur an additional cost should agree with what your Title Deeds say. It should cover whether owners need to have meetings or whether the property factor can take a vote from owners in writing, the majority required etc.

FINANCIAL OBLIGATIONS

This covers how owners’ funds are protected and how your maintenance account is managed. There must be procedures for dealing with advance payments.

Commercial managers must have separate bank accounts for home owners’ maintenance accounts and their own business accounts. The property manager may have one combined bank account for all his clients’ funds. Housing Associations and local authorities may keep owners’ funds with their own but must have an arrangement for identifying funds of individual owners.

If the owners have a Building Reserve Fund, it must be kept separately in its own interest bearing account.

The Property Factor must provide a detailed annual round up of accounts and supply supporting documents or invoices on a reasonable request (they can charge for copying but must tell you in advance)

provide information on the final account position within 3 months of being given notice (but there is leeway for bills for repair work or services which arrive late)

return any float or excess funds

DEBT RECOVERY

Property factors must have systems in place to monitor payments, issue reminders about outstanding payments and have a clear written procedure for recovering unpaid bills. This must include how the factor will deal with disputed debts.

They must inform non-payers of their intent to take legal action before doing so. They must not use threatening behaviour to recover debts – this applies to anyone such as Sheriff Officers acting on their behalf.

Factors must advise owners what the implications are for them if other owners do not pay. They must take all reasonable steps to recover debts before charging other, jointly liable, owners.

Charges for late payment must not be excessive (related to any cost the factor incurs rather than a penalty cost).

There must be a procedure for dealing with disputed debts and if an owner goes to the HoHP about the disputed debt, the factor cannot charge interest on the payment while the case is being resolved.

COMMON INSURANCE

give owners clear information on how their share of the insurance premium is calculated, the sum insured, the premium paid, any excess that applies to the policy etc

tell owners what commission or any other benefit the factor receives from taking out the insurance

have a procedure for dealing with claims

give owners all the information they require for making their own claims for internal damage

show owners any competitive quotes for insurance they received (if any) on an owners request

advise owners how frequently property revaluations are undertaken.

REPAIRS AND MAINTENANCE

Your factor must:

have proper procedures for owners to notify them of any repairs etc required including emergency contact details

keep owners informed of repair progress

show owners how contractors were appointed (on request)

ensure contractors have public liability insurance

disclose any commission paid by successful repair contractors and any financial interest he has with a repair contractor

pursue defects or cases of inadequate work

where appropriate ask for collateral warranties (allowing owners to act if there is a problem with a contract)

If your property factor is paid to make periodic property inspections (this may be at an additional cost) then he must also prepare a programme of works.

COMPLAINTS

Your factor must have a clear written complaints procedure and not charge for dealing with complaints. Owners must follow this procedure before taking their case to the Housing and Property Chamber which replaced the Home Owner Housing Panel (HoHP). The property factor should investigate complaints and where issues are unable to be resolved, inform owners that they can take the complaint to the Housing and Property Chamber.

Where you ask to see supporting documents, the property factor should make them available free of charge if you go to their offices but may make a reasonable charge for sending out copies.